Liquid Fund Metrics Ventures Research Report Summary:

1. Despite the market’s negative attitude towards Web 2.5 games currently, we believe that Web 2.5 games will continue to attract game producers with the unique advantages in game distribution and user acquisition. The development of the supply side and blockchain technology will lead to an explosion in demand.
2. Within the Web 2.5 gaming track, our particular focus lies on the gaming platform, which will have more attractive narratives and longer lifecycles, occupying crucial positions in the supply and demand sides of crypto gaming.
3. Based on business models and tokenomics, we categorize gaming platforms into four types: strongly-binding, moderately-binding (game chain), moderately-binding (investment-oriented), and weakly-binding. We believe moderately-binding platforms are healthier and more sustainable, establishing a beneficial connection with games.
4. We analyze top-tier gaming platform projects in the industry from three dimensions: strategic narrative, business capabilities, and tokenomics. After comparison, we consider Merit Circle to be a standout in this track, also presenting a target with a high investment cost-effectiveness. Merit Circle, transitioning from a gamefi guild to a gaming platform and then developing a gaming public chain, demonstrates outstanding capabilities of narrative, product development, and gaming resources. However, its valuation remains relatively low within the track, showing great potential for further development.

1 The beginning of the story: Why are we optimistic about crypto gaming platforms?

Despite the decline in the dominance of blockchain game users, we still see that gaming remains the most active segment of the entire industry. According to DappRadar, as of the second quarter of 2023, the number of daily active wallets in the gaming sector was 699,956, accounting for 36% of the total industry. While this is the lowest level since the third quarter of 2021, it still surpasses other types of applications.

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Based on the extent of blockchain integration, crypto games can be categorized into several types.

The transition from Web 2 games to complete Web 3 games (fully on-chain games) involves multiple stages, including asset on-chain, transaction on-chain, achievement on-chain, tokenomics on-chain, and core logic on-chain. Currently, many blockchain games have achieved on-chain integration except for core logic, leading to their classification as Web 2.5 Games.

Recently, fully on-chain games have been widely discussed, becoming one of the hottest narratives in crypto gaming. However, amidst the extensive enthusiasm for fully on-chain games, we recognize the ongoing significance of the business model of Web 2.5 games for the entire gaming industry. Web 2.5 games, through NFTs and token incentives, reduce the costs of game distribution and user acquisition, simultaneously transcending geographical restrictions, allowing games to have global users and capital from day 1, thereby displaying significant advantages in improving game release efficiency.

The user acquisition cost for games using NFTs approaches zero, whereas in comparison, the cost for Web 2 games is relatively expensive. Specifically, the user acquisition cost for RPG and SLG games ranges from 60 to 150U per person, while for strategy, casual, and midcore games, it ranges from 6 to 20U (data sourced from industry interviews, which may have some deviation from actual statistical data).

These advantages will be strongly appealing to traditional game developers. The sustained attractiveness of on the supply side will foster content richness, giving rise to genuinely playable and sustainable crypto games. With the development of AA wallets and blockchains with high TPS and low gas fees, the entry barriers to the Web3 will be further lowered. The content richness brought by the supply side and the user experience optimization from the technology development will impact the demand side of Web 2.5 games, potentially triggering the next industry boom. Currently, this point cannot be achieved in immature fully on-chain games. Therefore, it is the unique advantage of Web 2.5 games, which also presents a favorable timing for investment in terms of the industry cycle.

However, we must still take note of the challenges that Web 2.5 games are facing. These games generally have a shorter lifecycle, especially P2E games, primarily due to the short lifecycle of their assets and tokenomics without effective balancing mechanisms. The entire process of capitalization within the game is too obvious and rapid, leading to early monetization and speculative players.

We believe that there are two core logics that Web 2.5 games should focus on:

1. Playability
2. The advantages in game distribution and user acquisition compared to Web 2 games

Previous P2E games placed too much emphasis on the second, overlooking the importance of playability. A healthier and more sustainable game should achieve a balance between both, with richer content, stronger playability, and scientifically designed, moderately complex tokenomics. Under sustainable game design, we believe it is possible to achieve an increase in demand and consequently driving the growth of the Web 2.5 game industry, with the development of content and technology. Presently, the crypto gaming industry is also moving in this direction.

To sum up, we believe that Web 2.5 games still have considerable potential for growth and development. As mentioned earlier, there is a certain gap between our perception with that of the market. Web 2.5 game projects are generally undervaluing with a prevailing sense of negativity and pessimism which believes that P2E has died, especially when the narrative of fully on-chain games is widely embraced. This is precisely why we currently believe that this track holds investment potential and hidden value.

In the track of Web 2.5 games, we are particularly optimistic about the gaming platform/gaming ecosystem, for the following reasons:

• Each Web 2.5 game has its own lifecycle. On the one hand, games themselves (whether Web 2 or Web 3) have lifecycles, and on the other hand, the tokenomic models also have their own lifecycles. Compared to a single game, gaming platforms and ecosystems have longer lifecycles. They also have more resilience for trial and making mistakes to find genuinely healthy and enjoyable games. The recent popular game project, Parallel TGC, in January 2022, proposed its integration into the Echelon Prime Foundation ecosystem, transitioning from a single game to a gaming platform, serving as an example of this trend.
• From the perspective of game developers (the supply side), gaming platforms and ecosystems possess multiple game resources such as funds, Web3 player communities, and incubation services, which will become crucial gateways for new games. In the bear market where the overall NFT market is sluggish, relying solely on the sale of NFTs from a single game to achieve a cold start becomes increasingly challenging. Gaming platform will be helpful in this context, while the gaming platform can also capture a portion of the value of crypto games through the design of the tokenomics.
• From the perspective of game players (the demand side), whether they are Web 2 or Web 3 users, the guidance provided by gaming portals is valuable, enabling them to find games that better suit their preferences easily. More importantly, the seamless blockchain infrastructure provided by gaming platforms can reduce the cost for users during the transition from Web 2 to Web 3, lowering the entry barrier to crypto games and optimizing the overall gaming experience.
• It is necessary to separate content creation from user acquisition, extracting the function of user acquisition, which possesses financial attributes, as much as possible. This involves specializing Web3 gaming platforms through a tokenomic model that is not directly related to game content. Although current gaming platforms have not completely achieved the separation of these two functions, this direction is the most likely path for development in the field of crypto gaming.

Currently, we believe gaming platforms primarily includes the following categories:

• Game studios
• Publisher and ecosystems
• Post-P2E gaming guilds
• Gaming public blockchains

Among these, based on the relationship between gaming platforms and individual game projects, especially in terms of the business model and the tokenomic model, we classify these projects into four categories. Xterio, which has not yet issued tokens or publish the tokenomic model, is not classified here.

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From the perspective of the value chain and business model, the gaming platform should serve as a role that assists games in early-stage development, design, testing, and user acquisition. It should become the infrastructure of the crypto gaming industry and obtain corresponding value for these services, rather than being deeply bound with games and becoming part of the game’s tokenomic system.

Furthermore, the early binding of the game’s tokenomics with the platform token may strengthen the speculative and financial attributes of the game. Among the current strongly-bound gaming platforms, besides sharing the underlying tokens, the scenes of interoperability between games are still relatively limited. Therefore, it is still too early to call it an integrated ecosystem. However, it will also be difficult to attract investors without empowerment from games.

In summary, we believe that the moderately-binding is the healthiest. Moderately-binding platforms possess an independent tokenomic model and business logic, serving as the infrastructure and service provider for Web2.5 games. Its ecosystem has strong horizontal expansion capabilities, with tokenomics ensures direct benefits from the success of the games, representing a benign relationship of interest binding.

Furthermore, we will conduct a comparative analysis of the gaming platforms from several aspects, including strategic narratives, business capabilities, and tokenomics. We will provide our conclusions with valuations of the projects at the end of the research.

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(mCap and FDV data as of 2023/10/24, source: https://coinmarketcap.com/)

2 Strategic narrative and business capabilities: Continued development or stagnation?

2.1 Strategic narrative and fundamental analysis

TreasureDAO and Echelon Prime aim to present a narrative of an integrated gaming ecosystem, unified by a foundational token, with interoperability between various games. TreasureDAO, in particular, has been referred to as the “Nintendo” of the crypto world in multiple research reports.

Specifically, TreasureDAO emerged from the Loot ecosystem, later evolving into a decentralized gaming ecosystem built on Arbitrum. Within the TreasureDAO ecosystem, each project is constructed around the MAGIC token, with the option for each project to launch its own native token. Initially, TreasureDAO, originating from the Loot ecosystem, had a strong community consensus, and during its later development, it fostered a series of high-quality games through the development of developer-friendly toolkits. Its ecosystem reached a peak shortly with the launch of The Beacon.

The Echelon Prime Foundation, formerly known as Parallel, is dedicated to the development of crypto gaming and P2E. It provides infrastructure for games within the ecosystem along with a shared foundational token, PRIME. It aims to offer infrastructure, including secure wallet-side communication, end-to-end encrypted Inb0x, bonds for creating groups across multiple games, dedicated NFT distribution mechanisms, and oracles, to support a larger gaming ecosystem. The structure of the Echelon ecosystem is depicted in the following diagram.

Echelon Prime originated from Parallel TCG, a game backed by Paradigm’s investment and endorsed by a team of developers and designers from various prominent gaming companies. It has recently garnered significant attention and anticipation. Its upcoming game, Parallel Colony, presents an AI gaming narrative. However, Echelon Prime continues to emphasize P2E, potentially limiting its narrative expansion. Presently, the ecosystem only consists of two games, Parallel TCG and Parallel Colony, which still pose considerable uncertainties in terms of their ecosystem expansion. It could even be argued that the current hype around PRIME is more aligned with the narrative of the games rather than that of the gaming platform.

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Gala Games is an Ethereum-based gaming aggregation and distribution platform, serving as a leading platform from the previous bull market in the blockchain gaming industry.

The ecosystem primarily comprises five components: the gaming platform, games, a database, random algorithms, and a node network. Among these, the decentralized node network is the most important, enabling users who hold Founder’s Nodes to vote on which games Gala Games should launch and to earn revenue from Gala Games. According to official data, there are currently 44,433 active Founder’s Nodes. Furthermore, through a random allocation algorithm, NFTs of the platform’s games are airdropped to the Founder’s Nodes as rewards. Gala Games obtained initial funds through the sale of Founder’s Nodes without resorting to fundraising. On September 4th of this year, it was announced that Gala would fully migrate to GalaChain by the end of the year, but further progress remains to be observed. Gala’s ecosystem development has been relatively slow, and its future business capabilities are still under observation.

Xterio aims to become a GaaS platform that provides seamless tools and infrastructure for developers and players to facilitate the production and distribution of crypto games. Xterio’s technologies include CPDM for achieving NFT interoperability between different games using Zero-Knowledge and ensuring privacy protection. Additionally, Xterio collaborates with Palio to integrate AI into games and provide AI toolkits for developers. Xterio can produce games on its own and also releases and supports third-party games. Notably, it has invested in Web3 game studios such as Overworld and GamePhilos and has support from FunPlus, Com2us, and XPLA.

The game chain is an important category within the gaming platform, providing games with high TPS and low gas fees, and the narrative of public chain enables higher valuations. Technically, this includes L1, L2, Avalanche subnets, and the emerging L3, but the ability to attract gaming resources is the moat for their development.

• Wemix and Oasys are game public chains from South Korea and Japan, respectively.

Wemix is created by Wemade, the publisher of the flagship game “MIR4,” while the founding members of Oasys include the co-founder of YGG, the CEO of the blockchain gaming company double jump.tokyo, the President and CEO of Bandai Namco Research Institute, and the Co-COO of Sega. It has 21 initial validators, mostly comprising leaders in gaming and Web3.

• Ronin Network, launched by Sky Mavis, the producer of Axie Infinity, is an EVM blockchain designed specifically for gaming.
• Immutable, which developed and published Gods Unchained, has developed two Ethereum Layer 2 solutions for NFTs and Gamefi projects, namely Immutable X and Immutable zkEVM. Immutable X employs StarkWare’s solution and uses ZK-STARKS, while Immutable zkEVM offers EVM compatibility using Polygon Edge, which launched its testnet in mid-August 2023.

Merit Circle’s has undergone a significant strategical shift since the last Gamefi bull market. Evolving from a gamefi guild, it has transformed into a gaming platform that encompasses investment and infrastructure. Its narrative transition has been resolute and decisive, characterized by a clear strategic development plan and a high level of execution.

Merit Circle is building a vertically integrated gaming DAO with four parts: Investments, Gaming, Studios, and Infrastructure, covering multiple stages of the gaming industry. It is worth emphasizing that it has announced the complete closure of its scholarship program, demonstrating its determination to shift from a gaming guild to a gaming platform.

Among these, investment is the most crucial part for Merit Circle, including tokens, NFTs, and equity, along with staking operations. Studios are dedicated to incubating and promoting innovative games with groundbreaking concepts. Gaming serves as an platform offering games, industry education and practical tools. The core of the Infrastructure is the recently launched Beam subnet. Merit Circle has also passed a proposal to convert $MC into $BEAM, revealing the importance of the narrative of game chain in its ecosystem.

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YGG and GuildFi, developed from P2E guilds, continue to maintain the narrative of gaming guilds, focusing on investments, partnerships, and incubation of games, as well as coordinating community members, players, and contributors around the world.

In addition to the scholarship program and cooperative incubation of games, YGG has partnered with Nas Academy to establish the Web3 Metaversity. This allows YGG guild badge holders to learn new skills and discover career opportunities. The launch of GAP (Guild Advancement Program) also aims to incentivize and unite guild members while expanding the gaming community through the expansion of SubDAO. Additionally, it has established its esports teams and host esports events.

GuildFi has evolved from Thailand’s largest gaming community and guild. Apart from gaming investemnt, it has developed a Leaderboad system and Metadrop Launchpad to incentivize player participation.

The resources of these two major gaming guilds in crypto gaming remain significant, especially YGG’s leading position. However, as discussed earlier, the narrative and business of YGG and GuildFi are not directly empowering their tokens, and whether their business growth can drive token prices is still worth discussing.

2.2 Business capability analysis

The research compares the business capabilities of gaming platforms based on the number and development of games within the ecosystem. For the three investment platforms, Merit Circle, YGG, and GuildFi, the returns and risks of investing in them are significantly influenced by the stability of their treasury funds. Therefore, further comparisons of their investment returns and treasury management capabilities are necessary.

2.2.1 Development of Gaming Ecosystems

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The number of games within each ecosystem is indicated in the table above. A specific analysis is as follows:

The official game platform of TreasureDAO features a total of 27 games, including popular ones such as The Beacon, Realm, and BattleFly. The infrastructure within the ecosystem includes the central hub Bridgeworld, Trove, MagicSwap, TreasureTag, and an achievement system. TreasureDAO emphasizes interoperability within the ecosystem, with MAGIC serving as the fundational token. More advanced attempts to establish connections between multiple games were implemented, such as the Bridgeworld Harvester, which integrates The Beacon and Knights of the Ether into Bridgeworld. However, such mechanisms are relatively limited at present.

Following the decline in popularity of The Beacon, TreasureDAO’s daily active users significantly decreased, with MAU in July reaching only around 10,000, compared to approximately 90,000–100,000 at the end of 2022. Monthly Marketplace Volume in July amounted to around $1 million, indicating that the hit game indeed brought about a substantial increase in users. However, the games themselves have short lifecycles, and if the game platform has limited capabilities for expansion, users will also quickly diminish.

Within the Echelon ecosystem, there are only two games, Parallel TCG and Parallel Colony. Currently, Parallel TCG is in the beta-test, while Parallel Colony is still in development. Parallel TCG is a sci-fi NFT collectible card game based on the Ethereum blockchain, where players can buy and collect cards, and strategically use different cards to build decks and win the rewards. Parallel Colony is an AI LLM game where players can interact with and influence their AI Avatars but acts autonomously based on its memory and biography.

There are a total of 18 games in Gala Games, but currently only 6 are live, with the remaining 12 in various stages of development. The expansion of the gaming ecosystem on Gala Games has been relatively slow, with a lack of consistent new game releases or hit ones. Gala Games announced their Layer 1 Project GYRI, also known as Gala Chain, in February 2022. However, there is limited information available regarding the recent progress.

Xterio has currently announced 25 games, including 4 self-developed and 21 collaborative games. Most of the games are still in the pre-registration and development. Especially, all four self-developed games have not been fully released, requiring further observation and market testing.

Within the Oasys ecosystem, there are a total of 6 Verses, which are L2s for deploying Dapps. In total, there are 31 games, with 17 currently in a playable state.

The game ecosystem of Immutable is developing rapidly. Immutable has established partnerships with GameStop, Warner Games, iLogos, Mineloader, and Secret6. There are over 150 NFT and gaming projects, with 74 listed on the official website. Some of these projects were established after the launch of Immutable zkEVM and are not yet open to the public. Furthermore, Immutable possesses hit games, including Illuvium and Gods Unchained. According to Footprint, the trading volume on ImmutableX has maintained a leading position in the past three months. With the introduction of Immutable zkEVM, the Immutable ecosystem is expected to further expand.

Ronin currently still remains an application-specific chain targeted towards Axie Infinity. The official website displays only 6 games, including Axie Infinity. However, according to DappRadar, only Axie has a relatively high user activity. With the popularity of Axie, Ronin’s transaction volume remains strong among gaming chains. Nonetheless, new gaming chains are catching up with Ronin. Ronin may face challenges in sustaining its development without the introduction of new games.

The Wemix ecosystem currently includes 47 projects, comprising 32 games, 5 DeFi projects, and 9 NFT projects. Additionally, the WEMIX PLAY platform has over 30 games in the pipeline.

Merit Circle has investment in 78 gaming projects, including games, gaming infrastructure, and gaming platforms. Notable projects include OhBabyGames, Gameplay Galaxy, Delabs Games, and Roboto Games. Recently, Merit Circle has published the product details of its Avalanche gaming subnet, Beam. Beam collaborates with Openfort for the development of account abstraction and launches the Beam Companion mobile app to assist users in managing in-game assets. Additionally, the Sphere NFT marketplace facilitates NFT transactions within the ecosystem. Moreover, Beam SDK is provided to help developers swiftly build on the ecosystem. The seamless infrastructure is crucial in attracting game developers, enhancing the gaming experience for players, and ensuring user retention, providing a strong foundation for the development of the Beam subnet’s ecosystem.

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YGG has currently established partnerships with 83 projects, including 57 games, 17 P2E infrastructures, and 9 gaming guilds. Notably, as of June 30, 2023, investments gaming guilds have the highest share and have brought the highest return ratio for YGG.

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GuildFi has not disclosed the specific number and details of its investments . However, its Games Portal only lists 25 games, most of which are relatively early projects. Compared to other projects, its ability to collaborate externally and expand the ecosystem appears slightly doubtful.

2.2.2 Comparison of Investment Capabilities between Merit Circle, YGG, and GuildFi

For Merit Circle, YGG, and GuildFi, we are conducting a horizontal comparison of their investment capabilities.

Looking at treasury management capabilities, Merit Circle holds a substantial treasury amount ($94.1m) and publicly discloses the distribution of its treasury funds in the Dashboard. As of June 23, 2023, the AUM has decreased by 25.49% from its ATH, which is a relatively minimal decline compared to other gaming guilds. Currently, the stablecoin’s total amount in the treasury is $38.1m, accounting for 40.49%, while the rest mainly consists of equity investments. According to Defillama, 94.05% of the tokens in YGG’s treasury ($123.77) are $YGG, indicating a very poor ability to control risks. The significant drop in the price of $YGG has led to a decrease of over 90% in YGG’s treasury AUM from its ATH. GuildFi’s treasury AUM is $92.68M, with stablecoins and BTC/ETH/LP positions totaling $71.89M, accounting for 77.57%, the highest proportion of stablecoins and blue-chip crypto assets among the three guilds. Therefore, Merit Circle’s treasury management capabilities are slightly better among the three with a relatively reasonable allocation. YGG’s treasury, holding over 94% of YGG tokens, appears to lack reasonableness and resilience. GuildFi’s substantial stablecoin allocation, while presenting minimal risk, raises concerns about its gaming investments and external collaboration capabilities (the following are the treasury balance summaries for Merit Circle, YGG, and GuildFi, respectively).

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In terms of investment mechanisms and risk management, Merit Circle demonstrates a comparatively clear effort. MIP-6 has established a de-risk mechanism, enabling the DAO to exit under certain conditions. For instance, when the investment target reaches 10x, the assets’ principal can exit to control risk. YGG and GuildFi do not currently have similar mechanisms.

In terms of investment returns, the latest financial report released by Merit Circle shows that the total sum of Tokens & equity investments (sum of purchase value) is $28,045,486, currently valued at $45,471,587, with a floating profit of 62%. The total sum of NFT investments (sum of purchase value) is $4,834,000, currently valued at $3,404,852, resulting in a loss. In total, the floating profit is 48.65%. YGG’s current total investment (sum of purchase value) is $18,369,599, currently valued at $27,247,536, with a floating profit of 32.58%. The investments in gaming guild and games tokens have generated great returns. GuildFi has not publicly disclosed specific earnings data and investment targets. Therefore, Merit Circle’s rate of return is slightly better, but within the overall context of the blockchain gaming industry, the overall investment returns of each platform do not differ significantly. They have all experienced losses in NFT investments. As a result, we still prioritize their treasury management capabilities, risk control abilities, and gaming ecosystem development.

3 Tokenomics: How to carve out a slice of success in the gaming industry?

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(Data date: October 24, 2023, Source: https://coinmarketcap.com/)

Considering the current token circulation and future unlocking event, only TreasureDAO and Merit Circle have relatively high circulating supplies, while most other projects have a circulating ratio of less than 50%. Considering the potential selling pressure from future unlocks, both Merit Circle and TreasureDAO face lower downside risks.

In terms of token supply and empowerment, for gaming ecosystems and gaming chains, the supply and empowerment of tokens are fundamentally similar. Users acquire tokens through mining (blockchain staking or game mining), and these tokens further serve as a means of payment within the ecosystem (such as for NFT transactions or on-chain gas fees) and for in-game token consumption. Some tokens re-enter the circulation system after being spent (such as PRIME, which is redistributed through the contract after being consumed), while others are burned (such as GALA and WEMIX). Among these, TreasureDAO’s game ecosystem is more closely tied to its token. The MAGIC token will be directly awarded through games and serves as a foundational requirement for participation in multiple games. MAGIC is also a core resource that various games compete for.

The tokenomics of post-P2E gaming guild has slight differences, with Merit Circle, as a gaming guild that has undergone significant strategic transformation, featuring a more diverse range of token empowerment, maily including 3 parts:

• Governance: Any user holding MC tokens can propose and vote on MIPs. It’s worth noting that Merit Circle has a very high level of DAO governance. To date, there have been 29 MIP votes, mainly used to determine the strategic direction of Merit Circle. These MIPs represent key milestones for several critical aspects of Merit Circle’s business. MIP-2 established an investment committee and investment authorization to manage investment operations, MIP-6 created a structure to reduce risks when early token and NFT investments become liquid, MIP-4 decided on the development of gaming platforms and NFT markets, and MIP-17 conducted a restructuring of the DAO. The recently completed MIP-28 and MIP-29 passed the proposal to convert MC tokens to BEAM tokens.
• Buyback and Burn with returns of investment: Merit Circle buybacks MC tokens with a portion of the investment profits and then burn, reducing the circulation of MC in the market. Currently, a total of 368,707,273 tokens have been out of circulation.

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• Gas consumption on the Beam Subnet: Beam is the subnet developed by Merit Circle on Avalanche, focusing on the gaming ecosystem. It will use MC (BEAM) as the token for gas consumption. This greatly enhances Merit Circle’s empowerment capabilities. Currently, MIP-28 and MIP-29 have decided to convert MC to BEAM tokens at a ratio of 1:100.

In comparison, the token empowerment of YGG and GuildFi, also originating from gaming guilds, are relatively weaker. The main application scenario is staking to earn token rewards. The YGG Reward Vault is the core empowerment for YGG tokens, where YGG members with Guild Badges can stake $YGG and earn game tokens, including LOKA, THG, GHST, and RBW. GuildFi, on the other hand, rewards LP staking.

4 Conclusion: The next Alpha among gaming platforms

Here is a summary and comprehensive evaluation of the gaming platforms:

From the perspective of token empowerment and business models, we more recognize the sustainability and health of moderately-binding gaming platforms.

Among these, Gala’s ecosystem expansion has been relatively slow, and further observation is needed for the migration of Galachain. The controversial events surrounding the team have also significantly impacted investor confidence, similar to the situation with Wemix.

Oasys has a decent background in gaming industry, particularly with traditional game companies. However, they have yet to produce a hit game. Further observation is needed for their game ecosystem, considering that only about 10% of their tokens are in circulation, posing a potential downside risk.

Immutable has established two Layer2 solutions based on Ethereum. With over 150 game partnerships, its daily transaction volume is leading, making it one of the rapidly developing projects in the gaming ecosystem. It has some hit games, but undoubtedly boasts the highest valuation, even around twice that of other platforms.

Ronin’s game ecosystem has been expanding slowly and still remains more focused on Axie Infinity, yet to break away from the narrative of being an application-specific chain.

Based on the comprehensive analysis above, Merit Circle stands out in this track and is also a project with a higher investment cost-effectiveness ratio.

Fundamentally, Merit Circle’s transition from a gaming guild to a gaming platform and gaming blockchain demonstrates a clear strategic development plan and a high level of execution. It possesses narrative potential in both investment and public chain, with extremely high business scalability. Its performance in gaming ecosystems, treasury fund management, strategic direction, and DAO management is outstanding and ahead of similar projects. Currently, Beam subnet is becoming the primary narrative for the next phase of Merit Circle, as evidenced by the migration from $MC to $BEAM. Beam is currently a key focus in the Avalanche ecosystem, and with Merit Circle’s gaming resources, it is more likely to attract projects to join and achieve its cold launch compared to other gaming chains.

Furthermore, considering the valuation, MC’s current FDV is $317,879,400, which is relatively low based on its fundamentals and business capabilities. This makes it relatively undervalued and offers a favorable investment cost-effectiveness ratio.

Thirdly, MC’s current circulation ratio is relatively high, with a relatively small potential for unlocking selling pressure in the future. According to on-chain data, the number of holders has rapidly increased since the end of 2022, currently standing at around 12,000, which is twice the number at the end of 2022. The number of holders is still steadily increasing, with nearly all accumulations held for over a month, and a high proportion of long-term holders. Among the top 100 addresses, 85 addresses that entered earlier are still holding their positions. The top 5 holders account for a relatively stable proportion, approximately 25%.

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In conclusion, we believe that Merit Circle is a project worth considering and paying attention to in the Web2.5 gaming platform, and even the entire Web2.5 gaming track.

Furthermore, in other types of platforms, gaming ecosystems represented by TreasureDAO have strong crypto-native attributes. Leveraging the success of The Beacon, it has become the largest gaming ecosystem on Arbitrum, and we will continue to monitor its further development. Echelon Prime, as a gaming platform, is still in its early stages, with its FDV supported only by the narrative of a card game compared to other platforms. Xterio has certain technological advantages and a background in gaming resources, currently with a relatively high valuation in the primary market. We need to continue tracking Xterio’s after the tokenomics release. YGG and GuildFi, as veteran gaming guilds, have been exploring the construction of gaming communities and still possess a deep accumulation within the industry chain. They are worth continued attention, and their expansion in token empowerment may lead to an increase in token prices.

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